MPEG-2 Video is similar to MPEG-1, but also provides support for interlaced video (an encoding technique used in analog NTSC, PAL and SECAM television systems). MPEG-2 video is not optimized for low bit-rates (less than 1 Mbit/s), but outperforms MPEG-1 at 3 Mbit/s and above. All standards-conforming MPEG-2 Video decoders are fully capable of playing back MPEG-1 Video streams.[3]

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The ISO/IEC approval process was completed in November 1994.[4] The first edition was approved in July 1995[5] and published by ITU-T[1] and ISO/IEC in 1996.[6] Didier LeGall of Bellcore chaired the development of the standard[7] and Sakae Okubo of NTT was the ITU-T coordinator and chaired the agreements on its requirements.[8]

In 1996 it was extended by two amendments to include the Registration of Copyright Identifiers and the 4:2:2 Profile.[1][9] ITU-T published these amendments in 1996 and ISO in 1997.[6]

There are also other amendments published later by ITU-T and ISO.[1][10] The most recent edition of the standard was published in 2013 and incorporates all prior amendments.[2]

An HDTV camera generates a raw video stream of 149,299,200 (=24*1920*1080*3) bytes per second for 24fps video. This stream must be compressed if digital TV is to fit in the bandwidth of available TV channels and if movies are to fit on DVDs. Video compression is practical because the data in pictures is often redundant in space and time. For example, the sky can be blue across the top of a picture and that blue sky can persist for frame after frame. Also, because of the way the eye works, it is possible to delete some data from video pictures with almost no noticeable degradation in image quality.

TV cameras used in broadcasting usually generate 50 pictures a second (in Europe) or 59.94 pictures a second (in North America). Digital television requires that these pictures be digitized so that they can be processed by computer hardware. Each picture element (a pixel) is then represented by one luma number and two chroma numbers. These describe the brightness and the color of the pixel (see YCbCr). Thus, each digitized picture is initially represented by three rectangular arrays of numbers.

A common (and old) trick to reduce the amount of data is to separate each picture into two fields upon broadcast/encoding: the "top field," which is the odd numbered horizontal lines, and the "bottom field," which is the even numbered lines. Upon reception/decoding, the two fields are displayed alternately with the lines of one field interleaving between the lines of the previous field; this format is called interlaced video. The typical field rate is 50 (Europe/PAL) or 59.94 (US/NTSC) fields per second. If the video is not interlaced, then it is called progressive video and each picture is a frame. MPEG-2 supports both options.

Another common practice to reduce the amount of data to be processed is to subsample the two chroma planes (after low-pass filtering to avoid aliasing). This works because the human visual system better resolves details of brightness than details in the hue and saturation of colors. The term 4:2:2 is used for video with the chroma subsampled by a ratio of 2:1 horizontally, and 4:2:0 is used for video with the chroma subsampled by 2:1 both vertically and horizontally. Video that has luma and chroma at the same resolution is called 4:4:4. MPEG-2 supports all three sampling types, although 4:2:0 is by far the most common for consumer video.

An I-frame is a compressed version of a single uncompressed (raw) frame. It takes advantage of spatial redundancy and of the inability of the eye to detect certain changes in the image. Unlike P-frames and B-frames, I-frames do not depend on data in the preceding or the following frames. Briefly, the raw frame is divided into 8 pixel by 8 pixel blocks. The data in each block is transformed by the discrete cosine transform (DCT). The result is an 8 by 8 matrix of coefficients. The transform converts spatial variations into frequency variations, but it does not change the information in the block; the original block can be recreated exactly by applying the inverse cosine transform. The advantage of doing this is that the image can now be simplified by quantizing the coefficients. Many of the coefficients, usually the higher frequency components, will then be zero. The penalty of this step is the loss of some subtle distinctions in brightness and color. If one applies the inverse transform to the matrix after it is quantized, one gets an image that looks very similar to the original image but that is not quite as nuanced. Next, the quantized coefficient matrix is itself compressed. Typically, one corner of the quantized matrix is filled with zeros. By starting in the opposite corner of the matrix, then zigzagging through the matrix to combine the coefficients into a string, then substituting run-length codes for consecutive zeros in that string, and then applying Huffman coding to that result, one reduces the matrix to a smaller array of numbers. It is this array that is broadcast or that is put on DVDs. In the receiver or the player, the whole process is reversed, enabling the receiver to reconstruct, to a close approximation, the original frame.

Typically, every 15th frame or so is made into an I-frame. P-frames and B-frames might follow an I-frame like this, IBBPBBPBBPBB(I), to form a Group Of Pictures (GOP); however, the standard is flexible about this.

P-frames provide more compression than I-frames because they take advantage of the data in a previous I-frame or P-frame - a reference frame. To generate a P-frame, the previous reference frame is reconstructed, just as it would be in a TV receiver or DVD player. The frame being compressed is divided into 16 pixel by 16 pixel macroblocks. Then, for each of those macroblocks, the reconstructed reference frame is searched to find that 16 by 16 macroblock that best matches the macroblock being compressed. The offset is encoded as a "motion vector." Frequently, the offset is zero. But, if something in the picture is moving, the offset might be something like 23 pixels to the right and 4 pixels up. The match between the two macroblocks will often not be perfect. To correct for this, the encoder takes the difference of all corresponding pixels of the two macroblocks, and on that macroblock difference then computes the strings of coefficient values as described above. This "residual" is appended to the motion vector and the result sent to the receiver or stored on the DVD for each macroblock being compressed. Sometimes no suitable match is found. Then, the macroblock is treated like an I-frame macroblock.

The processing of B-frames is similar to that of P-frames except that B-frames use the picture in a subsequent reference frame as well as the picture in a preceding reference frame. As a result, B-frames usually provide more compression than P-frames. B-frames are never reference frames.

While the above generally describes MPEG-2 video compression, there are many details that are not discussed including details involving fields, chrominance formats, responses to scene changes, special codes that label the parts of the bitstream, and other pieces of information.

MPEG-2 video supports a wide range of applications from mobile to high quality HD editing. For many applications, it is unrealistic and too expensive to support the entire standard. To allow such applications to support only subsets of it, the standard defines profiles and levels.

A profile defines sets of features such as B-pictures, 3D video, chroma format, etc. The level limits the memory and processing power needed, defining maximum bit rates, frame sizes, and frame rates.

A MPEG application then specifies the capabilities in terms of profile and level. For example, a DVD player may say it supports up to main profile and main level (often written as MP@ML). It means the player can play back any MPEG stream encoded as MP@ML or less.

The tables below summarizes the limitations of each profile and level, though there are constraints not listed here.[1]:Annex E Note that not all profile and level combinations are permissible, and scalable modes modify the level restrictions.

^ abcSNR-scalability sends the transform-domain differences to a lower quantization level of each block, raising the quality and bitrate when both streams are combined. A main stream can be recreated losslessly.

^ abSpatial-scalability encodes the difference between the HD and the upscaled SD streams, which is combined with the SD to recreate the HD stream. A Main stream cannot be recreated losslessly.

^Temporal-scalability inserts extra frames between every base frame, to raise the frame rate or add a 3D viewpoint. This is the only MPEG-2 profile allowing adaptive frame references, a prominent feature of H.264/AVC. A Main stream may be recreated losslessly only if extended references are not used.

Broadcast TV - in some countries MPEG-2 Part 2 is used for digital broadcast in high definition. For example, ATSC specifies both several scanning formats (480i, 480p, 720p, 1080i, 1080p) and frame/field rates at 4:2:0 color subsampling, with up to 19.4 Mbit/s data rate per channel.